06/01/26

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The EUR/USD currency pair experienced a modest rebound during European trading hours, reaching a high of approximately 1.1530. The rally has been sustained into the North American session, reflecting a correction in the US Dollar after several sessions of strength. Following the Federal Reserve’s recent communication, which emphasized a hawkish stance, the dollar had gained momentum. Its recent correction is contributing to the pair’s temporary recovery, although upside gains remain cautious.

Economic data from the Eurozone has constrained the euro’s advance. The latest figures from Eurostat revealed that retail sales across the EU declined by 0.1% month-over-month in September, falling short of expectations and revising August’s data downward to the same extent. The annual growth rate for September was reported at only 1%, a notable slowdown from the previous month’s 1.6%, indicating subdued consumer activity that limits the euro’s upward potential in the near term.

Meanwhile, in the United States, employment data showed that 153,074 jobs were added in October. This figure represents an increase from earlier months but is less indicative of a robust labor market recovery. Additionally, the October Challenger Job Cuts report highlighted a significant rise in layoffs, with more than 153,000 announced in the month, compared to a typical range of around 55,000 to 54,000 in prior months. These employment indicators suggest some easing in labor market momentum, which could influence Federal Reserve policy considerations.

From a technical perspective, the EUR/USD pair remains in a cautious upward correction. It has secured support around 1.1470, with the 4-hour chart showing modest intraday gains and indicators like the Relative Strength Index (RSI) climbing above 50, signaling improved buying interest. Despite these signs, moving averages reveal a mixed outlook. The recent breach of the 20 SMA at 1.1503 has provided some short-term bullish pressure, although the pair remains below key longer-term moving averages, including the 100 and 200 SMAs, which point to potential resistance levels around 1.1665 and 1.1335 respectively.

In summary, while the EUR/USD pair is getting some short-term support from a dollar correction and technical factors, broader economic uncertainties and mixed technical signals suggest that downside risks may persist absent a decisive breakout above key resistance levels.